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US v S&P: Talking Heads and Highlights From the Suit

Feb 5, 2013 2:31 pm ET

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By David Benoit and Jeannette Neumann

The Justice Department’s 128-page lawsuit against Standard & Poor’s Ratings Services late Monday in a U.S. District Court in Los Angeles includes some of the latest highlights of financial professionals acting up.

The suit alleges that the largest U.S. rating firm “falsely” represented that crisis-era credit ratings on complex securities “were objective, independent” and “uninfluenced by any conflicts of interest.”

The lawsuit cites dozens of chats between analysts, internal reports and emails, all aimed at showing S&P didn’t actually stand behind the triple-A and other top-notch ratings it issued on hundreds of complex securities backed by home mortgages to U.S. consumers. Many of them are a bit on the lighter side.

S&P, a unit of McGraw-Hill said in a statement Tuesday that “Claims that we deliberately kept ratings high when we knew they should be lower are simply not true. We will vigorously defend S&P against these unwarranted claims.”